Dean Foods Co. announced strong second quarter results driven by continued solid growth across all operating segments as well as a continued focus on expense control. The company reported second quarter 2012 diluted earnings per share of $0.30, compared to a second quarter 2011 loss of $0.28 per share. The year ago quarter included a $131 million charge related to the settlement of the Tennessee dairy farmer class action litigation. On an adjusted basis, second quarter 2012 diluted earnings per share were $0.36, a 100 percent increase from the $0.18 earnings per diluted share in the prior year's second quarter.
Second quarter consolidated operating income totaled $146 million, compared to a consolidated operating loss of $16 million in the second quarter of 2011. Adjusted second quarter consolidated operating income totaled $157 million, a 37 percent increase from $114 million reported in the second quarter of 2011.
Separately, Dean Foods announced that The WhiteWave Foods Co., which will be comprised of Dean Foods' WhiteWave-Alpro segment, has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) relating to its proposed initial public offering of up to 20 percent of its common stock. Proceeds from the offering, as well as $800 million to $925 million to be borrowed under a new credit facility at The WhiteWave Foods Co., are expected to be applied to reduce Dean Foods' outstanding debt. As a result, management expects Dean Foods' leverage ratio to decline to approximately 3.5 times debt to EBITDA, as defined by its credit agreements, following the transaction, assuming a Q4 2012 closing.
In the event that the IPO is not completed by year end, management expects the Dean Foods year-end leverage ratio to be approximately 3.75 times. At the time of the offering, Gregg Engles will be appointed chairman and CEO of The WhiteWave Foods Co., while remaining chairman of Dean Foods. Gregg Tanner, president of Fresh Dairy Direct and chief supply chain officer, will be promoted to CEO of Dean Foods. Gregg Tanner has over 30 years of food industry experience with companies including The Hershey Co., ConAgra Foods, Quaker Oats Co., and Ralston Purina Co. His leadership of Fresh Dairy Direct and the supply chain organization over the past five years with Dean Foods has been instrumental in the strong return to growth at Fresh Dairy Direct.
"We continued to build on our momentum in the second quarter, delivering strong growth across all of our operating segments," said Gregg Engles, Chairman and CEO in a prepared statement. "In addition to each of our businesses executing well against their stated plans, we also continued to benefit from disciplined expense control across the organization. As a result of these efforts, we reported a 37 percent increase in consolidated adjusted operating income and a 100 percent increase in adjusted diluted earnings per share. We are pleased with the progress we continue to make on all fronts, which is clearly translating into significantly improved financial performance and flexibility."
Net income attributable to Dean Foods totaled $56 million, compared to a net loss of $51 million in the prior year second quarter. Adjusted net income for the second quarter was $66 million, a 105 percent increase from $32 million in the second quarter of 2011.
Net sales for the second quarter totaled $3.1 billion, compared to $3.3 billion of net sales in the second quarter of 2011, reflecting the pass-through of lower dairy commodity costs.
For the second quarter of 2012, the WhiteWave-Alpro segment reported net sales of $573 million, 11 percent higher than second quarter 2011 net sales of $514 million. Strong category growth, and continued investment in brand building, innovation, and marketing drove the second quarter performance.
Among the product categories at WhiteWave-Alpro, net sales in the plant-based foods and beverages platform, which includes Silk® soymilk, almond milk and coconut milk products, increased more than 20 percent in the second quarter, driven by continued strong growth of Silk Pure Almond®.